Larsen & Toubro is targeting growth in modular construction after completing fabrication and delivery of 110 modules weighing about 64,000 tonnes for Australia's largest urea plant, with the engineering major looking to use existing assets to win more overseas work while reducing labour and execution risks.
The modules for Project CERES, a 2.3 million-tonne-a-year urea plant in Western Australia, were fabricated at L&T's Kattupalli yard and shipped in 23 consignments.
L&T has about 200,000 tonnes of modular fabrication capacity across three centres in Oman, Hazira and Kattupalli, according to Chairman and Managing Director S. N. Subrahmanyan. After offshore requirements, about 100,000 tonnes could be available for onshore modularisation, equivalent to roughly three CERES-scale projects running concurrently.
The company does not expect a large incremental capital requirement to scale the business. Subramanian Sarma, Deputy Managing Director and President, said Hazira is fully depreciated and Kattupalli is about 50%-60% depreciated.
"We don't have a very high fixed cost," Sarma said. "Break even is on the lower side."
The focus is therefore on increasing utilisation and profitability of existing assets, he said.
The strategy is also aimed at addressing India's shortage of skilled construction workers. L&T operates more than 23 training institutes and trains about 46,000 people annually, while maintaining a database of workers who have worked with the company over the past decade.
Sarma said modularisation can materially reduce project delays by moving work into controlled fabrication environments, where labour availability, weather and other site-level disruptions can be better managed.
"Those risks will get substantially mitigated," Sarma said. "Naturally, I think the certainty in terms of completion on time increases quite significantly."
The global opportunity is substantial. Subrahmanyan estimated the market at about $150 billion over five years, while Sarma pointed to Canada, Australia and the US Gulf Coast, where labour costs and shortages support modular construction.
For L&T, the CERES project is also a reference case for competing with Chinese and Southeast Asian suppliers. Sarma said L&T had used automation andhigh- productivity measures on the project.
The company is seeking policy support through higher credit-line facilities, concessional taxation for export projects and export incentives. Sarma said such support would help, but L&T still needs to compete on productivity.
"We have to learn to become competitive and compete in the global market," Sarma said.
Separately, L&T is exploring equity partnerships for its Kandla green-ammonia project, potentially bringing external capital into the 300,000-tonne-a-year facility. Japan's ITOCHU has agreed to take the output under a long-term take-or-pay arrangement.
Subrahmanyan said the Kandla offtake agreement was largely complete and L&T expected to conclude the remaining clauses within weeks, with FID targeted by the end of 2026 or early 2027.
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